Reader Story: Escaping Poverty

This guest post from Karin is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how.

My family was weird.

When you’re young, it’s hard to know how a normal family should look and behave. I do know that from very early on, I sensed that something was awry. Although my father had a respectable and reasonably well-paid job and my mother (a housewife) seemed like a frugal household manager, we were always broke. Things that other kids didn’t think twice about — like school shoes, stationery, excursions, new clothes, dental treatment, and extra-curricular activities — were all out of reach for my family.

As a nerdy and bookish child I was already a target for bullies; going through school wearing ill-fitting hand-me-downs and being left behind when others went on excursions meant I might as well have had ‘beat me up’ written on my forehead!

It was easier to pretend my parents were strict and didn’t allow outings or fashionable clothes, than to admit we were too poor to afford them.

An Unhealthy Relationship with Money
Why were we poor?

There was a lot of secrecy in our household (I don’t think my mother ever knew how much my father earned), but it gradually dawned on me that my dad was a compulsive gambler. For his entire adult life, he gambled most of his income, and both parents used consumer credit — mountains of consumer credit — to survive day-to-day life. They had no savings, nothing put aside for a rainy day. Occasionally there would be a gambling ‘windfall’, and they would use the money to purchase unnecessary items (like ostentatious items of furniture, or sports gear they soon tired of) rather than paying down debt or buying sorely needed school shoes.

Neither of my parents had completed high school, and they saw no value in educating my sister and me beyond the minimum. This didn’t bother my sister as she wasn’t very academic, but it mattered to me. Despite having no educated role models — I was far too shy to confide in my teachers, for example — I somehow knew that education would be my ticket out of poverty. Unfortunately, my parents had no intention of allowing me to complete high school or supporting me for a moment longer than they had to, so in 1984 (at the age of 16) I left school to take up a full time office job.

My marks at school had been excellent, and I managed to sign up for part-time correspondence studies at a university. Looking back, I must have been incredibly motivated and driven, as the full-time work and part-time studies meant there was very little time left over for leisure — or to enjoy being a teenager.

My parents’ unhealthy relationship with money flowed down to me. When I started working I had no work clothes, and no money to pay for my university course or textbooks. Rather than helping out, my parents signed me up for a credit account. In no time, I was in debt to the limit, and when I turned 18 and became eligible for a Visa card I really went to town.

For the next few years I was constantly, deeply in debt. I would pay the minimum amount required by each month’s statement, and must have paid exorbitant amounts of interest over that time. My parents required me to pay board, and I moved out of home as soon as I could. Life felt more sane out of their orbit.

Escaping Poverty
At the age of 22, I bought a one way ticket to a much larger city, thousands of miles from where I grew up. Best decision ever. It was incredibly challenging to build a new life, and yet it was exactly what I needed. I arrived with almost no money, and accepted the first job I could find. Not ideal, but beggars can’t be choosers!

The first year was really hard. I lived from payday to payday, and again leaned too heavily on consumer credit. Several special things happened in my second year there though.

Firstly, after seven years of full-time work and part-time study, I completed my bachelors degree. That may not seem like a big deal to most people, but given my family background it was a huge achievement for me.

Secondly, I resolved to get out of debt. I cut up my credit card, slowly but surely paid it off, and taught myself to save up for things I wanted. My first purchase was a $400 CD player — it took months to save for, but I was so proud to have persevered.

Thirdly, that was the year I met my partner. He comes from a totally different world to me, one where education is encouraged, achievements celebrated, and budgets adhered to. Meeting him gave me added impetus to live an examined life, to make conscious decisions with an eye to the future rather than just concentrating on the here and now. (We’ve never married, but are still happy together more than twenty years later.)

The rest, as they say, is history. After about five years together we bought a tiny apartment (with a 20% deposit) which we paid off in less than four years by living very, very frugally. (No vacations, no restaurants, no new clothes.) Ten years ago we moved to a smaller city and sold the apartment, which left us with enough money to buy a modest but nice house with no debt.

I’m currently completing my fourth postgraduate qualification — I’m a perpetual student, and not afraid to admit it — and we have a good life: jobs we enjoy, worthwhile volunteer roles, and good friends. Frugal habits die hard, and I’ve never gone back to my spendthrift ways. We’ve struck a happy balance, where we live frugally and modestly for about 90% of the year, and take luxurious vacations for the other 10%!

An Exception to the Rule
I wanted to share my story as I suspect it’s quite unusual. A lot of poverty is inter-generational, and it is also odd for someone from such an uneducated family to obtain a university degree, let alone several.

Gambling is a secret shame for many, and could have ruined my life too if I had allowed it. The rest of my family still live in our crime-ridden home town. They’re still uneducated, still living hand to mouth, still mired in debt. On the surface they appear more affluent than my partner and me, with big houses, multiple cars, and the latest household gadgets. But I’ve made a choice. I could have those things if I wanted to (and could probably afford to pay cash for them) but prefer not to. There’s something wonderfully liberating about knowing when you have enough.

Reminder: This is a story from one of your fellow readers. Please be nice. After more than a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Henceforth, unduly nasty comments on readers stories will be removed or edited.

This is really interesting – what do you think has been the most pivotal in the financial component of your path out of poverty – your own drive, positive influence from your partner, your education credentials, or your education itself?

I really enjoyed your story – thank you for sharing it with us. I was wondering about what your relationship with your family is like today. I imagine there’s some tension there due to the differences in lifestyles. How do you handle that?

Well done!! The big question which I have after reading your, and other success stories, is what was the critical factor that made you make the right decisions where other people did not. In other words, why were you successful.
And you are absolutely right: enough is enough. But boy is it difficult to resist all temptations!

Like other readers, I have a question. It sounds like your parents will be reaching retirement age soon and, as you said, have a mountain of debt and little-to-no savings, while you and your partner have solid financial footing (congrats!). What would you do if your parents asked you for assistance in their old age? Or, perhaps put another way, how have your new financial habits and lifestyle changed your relationship with your family, if at all?

Thanks for sharing! This was actually really hard for me to read. I had to stop in the middle and come back. Your writing just evoked this incredible sense of dread as it became clear your first forays into adulthood would mean making your parents’ same mistakes. It’s wonderful to see how you turned it around, though I would’ve liked to hear more detail about how you made that transition.

I’m with those above who want to know what your relationship with your family is like today. Are they resentful of your success, or do they think you aren’t successful just because you live modestly (a la the Millionaire Next Door)?

Wow. Amazing story. You were pretty determined to change your life for the better. It’s sad when people don’t realize that their choices, especially financial ones, affect their loved ones and can affect multiple generations. Kudos to you for all that you have accomplished.

It was interesting hearing of your surviving on expensive credit card debt during your initial struggles to be independent. I’m struggling with the same issue, trying to re-establish a self-sustaining lifestyle after some major life setbacks, I’m almost paid up on my revolving-credit debt, next I have to pay down my student loans.

Anyway, I just wanted to comment because your remarks reminded me of a famous quip from real estate developer Trammell Crow, “The road to riches is paved with debt.”

Thank you for sharing! What a wonderful inspiring story. We are influenced by our upbringing but when we become adults, we can make our own decisions about how to live our lives. You chose who you wanted to be and fit your decisions to that. Bless you.

I applaud you Karin. We share a very similar story, but substitute parental alcoholism for gambling. I also used education and thrift to pull myself out of poverty, and know how much work that was for you. You are to be commended.

It is a fantastic success story Karin! With only a one in four student success rate (graduation) in our college system—you did it. With such a statistic as– only 12% of people have been able to climb out of poverty in the past decade—you did it. Being a perpetual student (of life) is the standard of who you are and want to become (an ever evolving and self improving soul). I’m sure it anchors you—away– from the residue of your past while it remains as a constant reminder. I salute you! And…this is a good example to all that the power lays within– not from around, about, or behind.

I too am interested in hearing what your relationship with your parents is like. Money has been a divisive force in my family and I’m always interested to hear if others have had better luck dealing with it.

Thanks for sharing your story, I found that it really resonated with me. I too grew up in a family that was “weird”, and like Karin didn’t fully realize it until I was older (late teens/early 20s in my case). We were never really poor per se, lower middle class, but my mother, despite making a good income as a nurse and not having an extravagant lifestyle, declared bankruptcy when I was in high school. And even though she encouraged me with my education, never put aside any money for me to go to college. I later learned that she was a meth addict while I was in high school (and it continued until I was in my early 20s). After seeing what she went through – spending all her extra money on drugs, running up credit cards, spending time in jail, ruining her career – I learned that I do not want to live my life like that.

I love and accept my parents for who they are, but also have used it as a lesson in how I don’t want to live my life. Like Karin, it wasn’t something I realized right away, but something that I had to learn over time.

My family also had its own dysfunction that I got out of. It’s good to remind people that they don’t have to defined by their circumstances and that it really is possible to change one’s life in the U.S. with new information and motivation.

I couldn’t agree with you more. I always said that I was not defined by my circumstances growing up. My parents had many demons and their children suffered greatly. I got out, got an education, married a wonderful man, and now live a ‘normal’ happy life filled with savings accounts, retirement accounts, and no consumer debt or addictions. The only sad part is that my sibling has repeated history.

Amazing story that really shows that despite the hand you’re initially dealt, you can still overcome and build a good life for yourself. Sure it takes a lot of hard work, but it’s possible. Hard work, perseverance and a level head can take you a LONG way!

Since you’ve reached a financially stable point, while your family still lives off of debt, how has your relationship with them changed? Is it a divisive issue? Or, because you don’t have the big house, fancy cars etc. do they not recognize that you’re doing better than they are?

I can identify with many things in your story except for the gambeling. I believe that my being raised in poverty wasdue to lack of education about finances and plain stubborness to learn. When my family wasin debt they just wouldn’t pay, letting anger and embarrassment cloud their judgement.
Having never been taught how to manage personal finances and being an adult on your own is so very difficult and can’t begin to tell you how much your story has inspired me and let me know it is possible to jump the tracks that my parents laid down and successfully break the habits they instilled.

I admire you for finding a way to dig out of that lifestyle. This inspires me – I wish I had been more future-oriented when I was younger, because now it seems very difficult to pay off the debt I have – no retirement and debt amounting to about a year’s worth of my pay. It definitely makes a huge difference if you have a partner – my ex-husband was a big gambler, and since I divorced him 15 years ago I have not had a steady partner to share expenses with, while raising two kids on my own. I am the most frugal person I know. At this point, I’m having to get very creative at finding ways to spend even less, so I need to figure out a way to make more with no degree, which cuts down on jobs I qualify for. I believe I can do it – and stories like yours do help. Thank you.

Having been through it my self, I think that may be simplifying it a bit. I know of many, myself included, who relieved themselves of debt prior to obtaining an education. In my case at least, my choice to educate myself came much later in life. Formal education may be one way out, but it is no substitute for determination and hard work. I work in the legal field now with plenty of educated people who are up to their necks in debt, and with addiction problems as well. I could be wrong, but I think mindset is the most important attribute.

I’m reading this just after a weekend in Vegas. In Vegas, there pretty much are 2 worlds–The Strip and then the rest.

Last night we went downtown Las Vegas for dinner and to walk around. It’s a lot of fun, they now have installed a zip line right above the downtown experience.

But even so, there is so much sadness. My wife and I were commenting about it and she said the reason it’s more sad to see the misery in Vegas than other parts of US is because if one is poor, one can easily see all the wealth around them.

I disagreed. I said that where poverty happens in other cities, at least one has family, whether supportive or not. In Vegas, it’s the last stop. So many not only must battle their drug and alcohol addictions, but they don’t have the knowledge of personal finance or even basic educational skills, and without family.

Sounds a lot like my own upbringing, though gambling would have to be alcoholism and addiction for my parents. I also put myself through college (first generation) but did so with the help of too many student loans. I’m still making a lot of financial mistakes, but know that things will fall into place eventually. In the meantime, I’m doing what I’ve got to do in order to create a strong future for myself and my eventual family. Thanks for sharing your story!

Karin, don’t think yours is such an unusual story. I relate to alot of it. My parents also abused credit and didn’t believe in educating their four children. You were fortunate in that you moved away from your family, started a new life and met someone with financial principles. I wasn’t so lucky. I can’t move away and I married a man who was financially irresponsible. Now I’m left holding the babies (3 of them), paying off debts and caring for elderly parents!!

Karin;
Thanks for sharing your story. You have a lot of courage for creating a new life for yourself. It’s a great challenge to change and I’m glad that your example is an encouragement for others to do what is necessary for healing, getting direction and moving ahead with their lives.

This is a wonderful, inspirational story. Thank you for candidly opening up about your financial life story; it definitely isn’t easy putting yourself out there.

I do have one question though: how did you pay for those four post-graduate degrees? I’m an undergraduate college student and I see grad school in my future–and the accompanying mountain of student loans.

Hi everyone, and thanks for reading my story. I’ve felt incredibly humbled and reassured by all your positive comments. There are a number of questions in the comments, so I want to try to answer them:

What is my relationship with my family like now?
We were never especially close yet I’ve always felt a strong sense of duty toward them. I would describe it as ‘distant but polite’. My father died over ten years ago and I never confronted him about the financial chaos he created; my mother was more a victim of the situation than an instigator so I see no value in discussing the past with her. I’ve always tried to play the role of the dutiful daughter: keeping in touch, visiting regularly, and contributing financially when they have asked, but on the whole I maintain a physical and emotional distance as I don’t want to get dragged back into their world.

Do my family ask me for money? Are they resentful of my success (or are they even aware of it?)
In the almost three decades since I left school I’ve doled out tens of thousands of dollars to my family. When my father was alive, especially, my parents would face sudden financial crises and I would give them money. My mother has taught herself to budget since my Dad passed away, and although she does still ask for money from time to time it is less frequent now. My sister and her husband still live on consumer credit and I’m sure they think we are poor because of our small house, one car, and simple lifestyle. I’m very happy to go on letting them think we’re poor

How did I pay for the postgraduate studies?
Cold, hard cash. I saved up for them and paid for them upfront as I studied. I have NEVER been a full-time student; I’ve always worked full-time while studying part-time. It has been really hard but at least I didn’t go into debt.

What has been most pivotal in my path out of poverty?
A tough question but I think it was the education itself. It gave me the confidence to realize I had options.

Thank you so much to JD for choosing to post my story, and thank you again to all the kind people who commented. All the best to you all!

Thanks for replying–it really is inspiring to read about your frugality, perseverance, and fortitude. I also liked your comment about living frugally for 90% of the year and taking vacations for the other 10%. This kinda reminds me of the “conscious spending” concept–choosing to spend generously on things important to you and cutting back on stuff that isn’t.

Thanks SO MUCH for your story! Although my family wasn’t quite so bad, I was also raised in a neglectful household with money troubles, discouraged from pursuing education (and finally got my BA after 20 years of off-and-on night school), and encouraged to finance my life with credit. Those are incredibly difficult setbacks to overcome and you did an awesome job of it. I’m still digging out of debt incurred years ago, so I know what an amazing accomplishment you’ve made.

I also want to drop a note to thanks to J.D. for posting Karin’s story. Although I love GRS, sometimes (especially lately) it seems like most of the GRS community are people who were taught personal finance at a young age and have never incurred debt or had financial trouble, and a few don’t seem to realize just how difficult it is to turn things around when you’re raised in poverty and dysfunction.

It is really helpful to read stories about how people like me have managed to dig out of debt and make positive changes.

Finally, a post on personal finance I can completely relate to. I too shared an innate sense of wanting more than what my family taught me. It took a ton of hard work (and mentors such as teachers and coaches along the way), but I’ve earned a life for myself, not just financially but in terms of my priciples and values, that I am proud of. As I’ve aged I’ve reconnected with family with a new perspective, in an attempt to build a relationship for the future rather than focus on the past.

Hear, hear Laura! Yes, GRS needs to feature those who’ve overcome financial adversity. Success stories have value too but we all need more knowledge to get out debt than how to enjoy life on the other side!!

Very encouraging story, Karin. You remind me of my parents in a certain way. They grew up in broken and dysfunctional homes (my father’s was exceptionally bad). I asked my mother a few years ago how she and dad had managed to stay married after so many years – they are celebrating 54 years of being together this year. She said they knew the effects of broken homes and they did not want to go through that as adults.

I guess you too, Karin, know the effects of poverty and do not want to continue living such a life. Congratulations on beating the poverty cycle!

Karin, you are amazing!
I really felt the need to respond to your story, you see I have a similar family background re: my father & his gambling problem.
He was a wonderful, kind man but had that dreaded gambling addiction…& it didn’t help that he worked as a simple laborer at a menial job. He retired in 1980, with his wages still only at $5.00 per hour. with no benefits.
My mother worked full-time(simple factory work) most of my childhood with breaks being only when she was laid-off. I was a latch-key kid.She always made more than Dad & budgeted better, but couldn’t support 4 kids with only her income. Even so, they always kept a roof over our heads & cheap food on the table, but the electricity or phone was always being turned off,because of my father gambling his pay away.
We lived in a housing project in a big city (never owned a house), & my Dad always drove cars that were falling apart (we called them “junkboxes”)…the difference with my story is that my parents never used credit. They didn’t have bank accounts, medical insurance, & just lived week to week. And that’s how we all grew up.
my parents also did not have more than a 8th grade education. All of us kids had High school & three of us went to college. Mostly free because of grants, that’s how low our income was. But we were all WORKING poor. Never on public assistance, & to this day our work ethics are incredible.
My siblings & I all absolutely Fear some aspect of being poor & even though we don’t have the gambling issue my father had, we all have some obsessive compulsive aspect…like hoarding(stocking up on too much)food, or not willing to part with possessions, or being so “cheap” it affects our relationship with each other, etc. I imagine people growing up during the Depression had similar traits.
In any case, I just thought I would tell my story to denounce the evils of gambling & how it really does affect families more than you’d think!
Thank you, Karin, for bringing attention to this with your story!!!

This sounds remarkably similar to my childhood. Phones, electricity, carpeting, kitchen sinks that worked, clothes that fit. These were all luxuries. But I put myself through college and married a smart guy. I got out. I think there are two very important reasons – I made a choice and I stuck with it (with some encouragement from my now husband) even when things seemed impossible.

I spent 9 years working for a family that made an average of 1.5 million dollars a year. I can tell you it was an eye opening experience for me. I too grew up poor and felt money was the key to happiness. The eye opening part for me was watching friends and family always needing financial aid. To me it looked as if it was hard to tell who these peoples true friends were. the second thing was I noticed these people were less happy then me and my modest income.

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